By Stephanie N. Mehta
September 9, 2009

There is life after the recession. But it calls for a more evolved, employee-centric CEO

By Vineet Nayar, CEO, HCL Technologies Ltd.

The inherent human urge to deny, avoid and fight change is a hard one to beat.

Take the current recession: Most corporations tried to battle and beat the game of change. And yet, the only ones that came out smiling from it were those who embraced it, rather than challenge it.

The Bhagavad Gita puts this succinctly when it says that the human body is subject to constant change and is constantly adapting to it everyday. And in the After Life, or as we in India call it, in the punarjanam (the rebirth), the new world operates on new principles–including new definitions for what constitutes a good business leader.

In an earlier incarnation a powerful CEO was a person in a relentless chase of growth, bottom-lines and shareholder value. He or she knew the numbers well, but rarely went beyond it to understand the needs of the organization’s employees as well as its customers. This CEO worked in a structured environment where the approach was almost always top down and customers were not worked with but for. Further, this type of CEO worked within the constraints of a system that made collaborating with competition unthinkable.

The reincarnate CEO is still in pursuit of shareholder value. But, far more than monetary gain, the term “value” now translates into sustainability. Rather than pursuing and attaining standalone corporate social responsibility, leaders are now expected to embed responsibility into core business strategy – across all stakeholders.

Destroying the office of the CEO

I have spoken about the need to destroy the CEO’s office before. The need for this restructuring is even more critical today. It is now time for the organizational structure to become flat. Rather than directing from the top, or leading from the front, they need to assume the role of a co-worker and adopt more effective collaborative techniques.

In short, responsibility and accountability will need to flow both top to bottom as well as the other way. As companies realize the important role played by frontline employees in the everyday business of customers, they are increasingly making employees the bishops of this game, and they are going to drive change in the global market.

Within this landscape, the importance of a “Velcro” organization that can make itself sticky and valuable to employees has been emphasized time and again by experts like C.K. Prahalad. We must create new leaders who understand customer needs, but also the need to break away from archaic organizational structures to truly maximize the talents and wants and needs of their team members.

Gary Hamel captured the needs of a “post managerial society’’ very effectively when he noted that in the years to come “decision-making will be more peer based; the tools of creativity will be widely distributed in organizations. Ideas will compete on an equal footing. Strategies will be built from the bottom up. Power will be a function of competence rather than of position. ” The recession has given us a new beginning. And how well businesses and organizations do will well depend on whether they decide to play it by the old rules or new.

Nayar is CEO of HCL Technologies Ltd., a $2.2 billion information technology services company. The Harvard Business School has written a case study on HCL and Nayar’s leadership of the company.

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